The success of the Board is 100% dependent on the success of the CEO the Board has hired.
Hiring is an extensive effort and is only worthwhile if the Board makes the right decision. Interviews, resumés and references give important information, however to avoid subjectivity and unconscious bias, cooperation with an Executive Search Partner is often the solution.
Using an experienced Executive Search Partner will bring additional benefits.
The Board‘s Chair should conduct individual discussions with each Board member regarding the organization‘s strengths and weaknesses, internal as well as market-driven challenges, and leadership needs for the future.
As a result a profile of the leadership attributes and behaviours necessary to successfully fulfil the CEO role can be developed and reviewed with the entire Board of Directors.
The Executive Search Partner will ensure the profile is both comprehensive and well tailored to the situation.
The most successful CEO appointments include consideration of both internal and external candidates.
It is important to remember that succession is rarely a neat process and the Board needs to have realistic expectations.
We recommend benchmarking to gain an objective perspective on the internal candidates and to assess the quality of CEO talent externally — particularly when the context, competitive landscape and company‘s strategy is changing.
An experienced Executive Search Partner will deliver job market insights in a short period of time.
An external Search should be led by the Chair of the Board together with the trusted Executive Search Partner to ensure that the very best candidates are considered.
The Partner that has trusting relationships with candidates, information sources and referees can help the Board to develop a long-list of prospects based on candidates' previous roles and industry experience.
Once a long-list is settled, all candidates, internal and external, should be ranked against the core competencies and attributes agreed in the CEO Profile. Those that best meet the profile should be included into the short-list.
The Nomination & Remuneration Committee and/or the Executive Search Partner will typically conduct interviews to reduce the list to a small group of 2 or 3.
The Board can get excited about a candidate‘s resume without fully understanding whether the executive’s views about strategic direction and leadership style are fully compatible with the Board’s own view, and within the framework of the organization’s desired culture.
Therefore the final candidates are typically given an opportunity to present to the Board, followed by Q&As. The presentation is useful to understand differences in the candidate's vision of the company‘s strategic direction, approach to leadership, personal motivations and aspirations.
All Board members should be involved in the interviews of the final candidates and use an interview guide that the Executive Search Partner can provide. The guide outlines critical competencies for the position and the key organizational culture attributes for rating the candidates in these areas. This eliminates subjectivity, helps to focus on concrete skills and performance, and allow agreement on a single candidate.
The Executive Search Partner is in position to arrange thorough reference checks. Ideally, the checks should be done in person with members of the Board present, so critical non-verbal communication is not lost.
We know that the most successful hiring processes are those in which the right people are brought to the table, the specification is designed with the future strategy in mind and the candidates are assessed holistically.
While there can be immense pressure to make a decision quickly, the Board must resist that urge and take the time necessary to make a fully informed decision.
You have been responsible for international business development for years. What do you enjoy most about this role?
Diversity. Diversity, in terms of colleagues, cultures, projects and the international scene where we service our Clients. It delivers new challenges on a daily basis that I need to solve rather fast. Besides my work as a consultant on the Hungarian market, my international business development role makes it more complex providing me with a lot of new information, insights of international trends and involvement with how our Partners handle projects in various countries. It is just fun!
The concept of thinking globally is now more widespread. Why do you think Friisberg is so successful working globally and on cross border assignments?
Quite simply, Friisberg can be very responsive to the markets. Our flexible methodologies mean some of our offices actually exhibited massive growth during 2020, which is simply admirable. Even before the pandemic we positioned Friisberg not only as a trusted search firm, but also a management consultancy firm, delivering solutions for business leaders in management audit, board services, network science-based organisational development and business partner search.
What qualities do you think are required to facilitate effective international business development?
You must love it and you must be dedicated to it. Having inspiring people around you whether that is your colleagues, clients or candidates, helps and we must all listen to each other carefully. Openness is very important in such a role.
How do you use technology? Do you use business intelligence tools or systems and what steps you do take to analyse trends and identify new opportunities?
Throughout Friisberg we use various cloud based platforms for our business administration, but most importantly our Friisberg Network Advisory (FNA), which is a network science-based organisational development tool supported by AI, reveals the social network of the company and provides the opportunity to visualize and thus analyse and manage the relationship of business units and individuals. This is much loved by our clients too!
Where do you see Friisberg in 5 years’ time?
Friisberg is a growing organisation so my role is increasingly interesting. We are opening new offices in new cities and new countries and we plan to expand even more in the coming years. The future is very bright for Friisberg!
Zoltan Petho
Partner, Hungary
With such economic volatility and uncertainty currently, oversight by boards is more important now than ever.
A balanced view is critical to the success of a company, and maybe even its survival. However, boards may whether wilfully or unwittingly converge on collegial consensus and by doing so fail to address crucial issues. Independence from each other and thereby better collective decision-making are interconnected prizes that are hard fought but well worth winning.
In 2015, Siobhan Sweeney’s “The creation of the Contrarian Director and their role in achieving workable board independence and better risk oversight” caused something of a stir. The premise of that paper is as pertinent now as it was then, and in the aftermath of Coivd-19 perhaps even more so. Having a ‘Contrarian Director’ - a devil’s advocate - on a board to question the herd instinct, to investigate alternatives and recommend innovative approaches whilst acting independently and impartially will deliver more robust examinations of facts, options and proposals.
The longstanding and arguably inevitable consequence of capitalism is that the untried, untested, unknowns are avoided in favour of their more familiar counterparts. The composition of a board of directors will often follow the same trajectory, with reinforcement of success in the form of making another appointment not too dissimilar to the last. The case for independent thinking, and diversity of background (gender, ethnicity, education, experience) has not been made in sufficient boardrooms - all too many boards continue to miss opportunities in the appointment process leading to a reinforcement of an established culture.
Groupthink and confirmation bias in a board room are dangerous and difficult to root out. They can easily override the most rigorous of decision-making processes and detract from even the most respected expert opinion. Self-awareness is the key to reversing such a slide.
Chairs, and other NEDs should recognise when:
Consciously or subconsciously Chairs may prefer directors who will help them build a consensus. The concept of the contrarian runs counter to that – and deliberately so – so it will take a strong Chair (and CEO too) to actively seek out and secure someone to the board who can and will challenge them, routinely, but professionally of course.
Once the benefits of more varied thinking in the boardroom become apparent, then the same principles extended to senior management and throughout a company might yield yet more advantages for that company.
But… do please feel free to disagree with me!
Andrew Guy
Partner, UK
As diversity gradually increases in many boardrooms (still too slowly, in my opinion) we are seeing more women take on the role of:
Now, I know some would argue that Chairman is not necessarily a masculine term in much the same way as we use hu(man), wo(man) or fe(male).
I disagree.
If it doesn’t matter, then why don’t more men call themselves Chairwoman?
Well, I asked a couple of Chairmen and they felt to call themselves a Chairwoman would just be daft. Yes, perhaps, but no more daft than the other way around – surely?
We still live and work in what is irrefutably a man’s world, and historical semantics dictates Chairman literally means a Chair who is also a MAN.
However, I know plenty of women who refer to themselves as Chairman.
Why?
In the UK, the Companies Act 2006 actually specifies the term 'Chairman' - which is as astonishing as it is unnecessary - and may be the reason.
But, do women really aspire to holding a masculine title? Are they content that it’s the way it has to be? Do they care nothing for its sexist overtones? Perhaps they are actually afraid to rock the boat in what might be a predominantly male boardroom?
But argue I must and argue I will.
I care deeply about the message it sends. If men want to call themselves Chairman, fine. It’s accurate. If women want to call themselves Chairwoman, well, that’s fine too. However, if women use Chairman, aren’t they saying, “I identify as a woman, but this is a man’s world, and I need to conform to get on."?
It sends the wrong message to women, and it also sends the wrong message to men too, especially younger men who shouldn’t be growing up with the potential for a sense of entitlement - that the seat at the head of the table is reserved for ‘men’ only.
Why not use the simple, non-gender specific term Chair?
It’s short, to the point, offends no one, creates no sense of entitlement, and does not attribute gender to something that is absolutely nothing to do with gender…
If you are reading this article and huffing and puffing or muttering about ‘political correctness gone mad’ – there is no need to ask ‘What’s the problem?’...
Lorri Lowe
Partner, UK
